Thursday, July 21, 2005

Wal-mart: Chalo India Movement....

2 months back, I had mentioned about the Interest that Wal-mart has been showing in the Indian Markets and Indian visits by some officials.
Till now, India was a country for sourcing and procurements, with procurement centres established in Bangalore for the South Asian countries.

But, with a huge luring market of approximately Rs. 900,000 Cr., and ease of govt. regulations in sight, the 95% of the unorganized Retail Market is surely in for a great time ahead.
In his latest visit to US, Prime Minister Manmohan Singh is scheduled to meet with Lee Scott, the CEO of Wal-Mart.
Though official Press Releases allude to the "purchase of Goods" from India, Industry Experts aver that there is more to the meetings than sourcing.
"Wal-Mart in recent months has upped the ante in its campaign to woo the Indian government and Indian consumers. Retail analysts say Wal-Mart needs to look for new international markets to fuel growth, especially as its U.S. market becomes increasingly saturated. "

With Indications from the Indian Premier to open up its markets, India has become one of the most attractive Investments for Retail - a sector that contributes 10% to the GDP of the Nation.
One of the Strategists said that "Wal-Mart is moving step-by-step and cementing relationships first with the Indian government before it launches any major plan of entry. "
Talks are on for FDI to be allowed in standalone and branded retail sectors. As of now, it is only allowed through the franchise and license route.

The Market Size is Rs. 900,000 Cr, growing at 5-6% annually. The Organized Retailing is growing at 30%. FDI would entail fall in prices by 10%, resulting in the rise in consumers' income by 5-6%.
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